Wavy Company had a beginning work in process inventory balance of $ 32 comma 900$32,900. During the year, $ 54 comma 700$54,700 of direct materials was placed into production. Direct labor was $ 64 comma 100$64,100 , and indirect labor was $ 20 comma 400$20,400. Manufacturing overhead is allocated at 120120 % of direct labor costs. Actual manufacturing overhead was $ 87 comma 000$87,000 , and jobs costing $ 225 comma 500$225,500 were completed during the year. What is the ending work in process inventory balance?

Question

Business

Tough Guy

1 July, 05:56

Wavy Company had a beginning work in process inventory balance of $ 32 comma 900$32,900. During the year, $ 54 comma 700$54,700 of direct materials was placed into production. Direct labor was $ 64 comma 100$64,100 , and indirect labor was $ 20 comma 400$20,400. Manufacturing overhead is allocated at 120120 % of direct labor costs. Actual manufacturing overhead was $ 87 comma 000$87,000 , and jobs costing $ 225 comma 500$225,500 were completed during the year. What is the ending work in process inventory balance?

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Answers (1)

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Aldo Glenn · Answer 1

The ending work in process inventory balance is $3,120

Explanation:

Ending work in process inventory =

Beginning Work in progress inventory + Direct materials + Direct labor + Manufacturing overhead (applied) - Cost of goods manufactured

Beginning Work in progress inventory = $32,900

Direct materials = $54,700

Direct labor = $64,100

Manufacturing overhead (applied) = 120% * $64,100 = $76,920

Cost of goods manufactured = $225,500

Ending work in process inventory = $32,900 + $54,700 + $64,100 + $76,920 - $225,500

= $3,120

Therefore, The ending work in process inventory balance is $3,120